We present medium-resolution spectra from 2.8 to 3.8 mum of 11 young association members and eight background stars seen in the direction of the Corona Australis molecular cloud. Examination of the 3 mum water-ice absorption feature indicates that ice condensation has occurred and may account at least partially for the initial growth of anomalously large particles known to exist in the cloud. The durability of ice grains is strongly influenced by the environmental changes during early stellar evolution; the absorption feature is most prominent in embedded objects and diminishes among optically visible stars. As in other molecular clouds, the amount of ice is found to correlate linearly with the column density of grains along the lines of sight, and there exists a threshold visual extinction only beyond which is the ice absorption detected. The threshold extinction in CrA is moderate, about 3-4 mag, similar to that found in Taurus.